Dubai's DFSA issues guidelines for listing of blank-cheque companies
The Dubai Financial Services Authority, the market regulator of the Dubai International Financial Centre, issued guidelines for listing special purpose acquisition companies that are designed to mitigate some of the risks associated with investment vehicles known as Spacs.
The regulator's approach may vary depending on the nature and complexity of a proposed Spac, also known as a blank-cheque company, and listing of each investment vehicle will be “considered on a case-by-case basis”, the DFSA said in a markets brief.
Spacs will be required to ring-fence proceeds raised from investors. Applicants will also be required to appoint a sponsor company for the initial listing and subsequent acquisition of a target company, the regulator said.
“We believe that Spacs should adequately ring-fence proceeds raised from investors,” the DFSA said. “This is to protect investors from misappropriation of funds or excessive running costs being incurred by the Spac’s management.”
Spacs may appoint independent third parties to protect proceeds raised from investors and the regulator may consider imposing “further safeguards on how the Spacs proceeds may be invested prior to any use”, it said.
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